Lockheed Martin rebuts F-35 critics on cost, progress

After a bad start to 2010, U.S. officials are at Farnborough to persuade their eight international partners that the original ambitions for the F-35 Joint Strike Fighter are still intact. Escalating cost estimates and flight-test delays have cast a shadow over the airplane billed by Lockheed Martin as the only exportable fifth-generation fighter.

Unlike previous shows, there will be no stage-managed public parade here of the U.S. and international customers, all professing confidence, enthusiasm and unity. But in low-key media and private briefings this week, the F-35 message is that the goals of all-aspect stealth and superior avionics integration in a mass-production, multi-role combat aircraft can still be achieved.

The tone for these discussions was set in Washington last month, when Lockheed Martin chairman and CEO Bob Stevens declared, “There is no more affordable alternative capable of performing the mission.” He maintained that if Lockheed Martin can secure the production volume, the acquisition cost of the F-35 will be equivalent to a similarly equipped F-16 Block 60 or F-18 fighter.

That would be around $60 million in current dollars. Unfortunately, the official Pentagon estimates currently suggest that the average production unit cost (APUC) will approach twice as much–about $112 million. Early production aircraft are costing more than that (at least $125 million each), as will the F-35B version with its STOVL (short takeoff and vertical landing) capability.

What’s more, these APUC estimates do not include amortization of the F-35’s development bill, which is now expected to be a cool $53 billion. Moreover, they assume, like Stevens himself, that most or all of the planned 2,443 aircraft for the U.S. and 730 for the eight international partners will actually be produced.

The Pentagon set up an F-35 Task Force and turned to three internal review organizations after top officials lost confidence in the data coming from their own F-35 Joint Program Office (JPO). U.S. Secretary of Defense Robert Gates fired the Marine Corps major general heading the JPO, David Heinz, last February. According to Dr. Ashton Carter, Undersecretary of Defense for acquisition, technology and logistics, a combination of unforeseen engineering changes and other factors went unacknowledged and virtually unmanaged for two years. “We should have better situational awareness and better early warning about the status of our programs,” he said recently.

Production Line Problems When asked by the U.S. Senate Armed Services Committee what had gone wrong with program, Carter explained that there had been problems on the production line with multiple items having to be changed after various elements of the aircraft didn’t fit together correctly. “Labor and overhead rates went up. Commodity prices increased, especially titanium. The short takeoff/vertical landing version cost more to develop because of weight growth. There was a degradation of airframe commonality. There was major cost growth at the subcontractors,” Carter said.

Lockheed Martin officials take issue with the Pentagon’s APUC estimates, which come from the cost analysis and program evaluation (CAPE) office. “The CAPE model uses production costs derived from the F-18 and F-22 programs and extrapolates them out to 2037 using only a 50-percent confidence level,” Steve O’Bryan, vice president for F-35 business development, told AIN. “That model takes no account of our plans for lean production, nor our much lower supplier costs. For instance, we can buy an F-35 radar for half the cost of an F-22 radar. We can make the same order of savings on the electronic warfare system and other avionics, including the single-piece plasma screen in the cockpit.”

Moreover, he added, the APUC figure includes military construction necessary to support the F-35 and a portion of the support costs. The F-35 comes complete with radar, avionics, defensive systems and so forth, as well as weapons pylons, he noted.

“While the U.S. government uses the high independent estimates for program budgeting purposes, it holds the contractor to an entirely different standard in contracting for the actual aircraft,” another Lockheed Martin spokesman told AIN. Negotiations for LRIP Lot 4 (low rate of initial production) have been under way in the weeks leading up to this week’s Farnborough show. The government’s offer was 40 percent lower than its own CAPE estimate for this lot, while Lockheed Martin’s opening bid was 20 percent lower than the same estimate. “We’ll settle somewhere in the middle of that range,” the spokesman added.

In his remarks last month, Stevens added that this LRIP Lot 4 contract will be agreed on fixed-price incentive terms for all three versions of the airplane. “That’s two years ahead of the original plan to go to fixed prices,” he noted. All previous F-35 contracts have been cost-reimbursable.

The other big problem has been the slow pace of flight testing caused by late delivery of the 13 system development and demonstration (SDD) aircraft. This has only increased concerns that there is too much concurrency between development and production in the F-35 schedule. The Government Accountability Office (GAO) of the U.S. Congress has consistently criticized the F-35 program on this point, earning the scorn of the F-35 JPO and the contractors, notably Lockheed Martin.

The Pentagon has adjusted the development program by adding another aircraft for the SDD and $400 million more funding for the SDD in the current fiscal year. It is also moving three LRIP aircraft that were previously allocated to operational test and evaluation (OT&E) into the SDD.

Lockheed Martin also was told to boost the resources allocated to software development. The Pentagon believes these actions will reduce the delay in completing the SDD to 13 months, from the 30 months that was forecast by its task force. It has withheld $614 million in payments to Lockheed Martin so that “the contractors will share in the process of getting back on track,” said Carter. “All milestones are now defined and award fees will be tied to them,” he told the Senate armed services committee.

Fear of ConcurrencyBut the fear of concurrency remains, particularly since there has been no apparent relaxation in the target date of 2012 for initial operating capability (IOC) of the F-35B with the U.S. Marine Corps. The planned IOCs for the U.S. Air Force F-35A and U.S. Navy F-35C are both in 2016, using Block 3 software.

Each service defines IOC differently, but it is clear that the early production F-35s will be delivered with the limited functionality of the Block 1 software (and with only the internally carried weapons qualified). Lockheed Martin says it will deliver the two LRIP Lot 1 aircraft to Eglin Air Force Base in the fourth quarter this year, on schedule, so the Marine Corps can begin flight training of instructor pilots. They are already “flying” the full-motion simulator there.

The extent of the concurrency can be gleaned from the JPO’s latest table of planned procurement quantities, dated last November. From this it can be seen that over 500 aircraft will already be on order, before the SDD is finally signed off in 2014. And yet the full-rate production decision (“Milestone C”) now is not due until April 2016.

Of course, this buy plan is subject to alteration, particularly by the international partners. Canada and Denmark are formally evaluating alternatives to the F-35. The UK has already moved to the right 17 of the aircraft it planned to procure by 2014. It is likely to cut the planned total buy after the current UK Strategic Defence Review. The Dutch may not buy their second aircraft in LRIP Lot 4, after all. According to the GAO, only 10 percent of the flight test sorties that were planned last year actually took off. Lockheed Martin says flight test activity is accelerating rapidly. By the end of June, about one-third of the 394 test flights scheduled for this year had occurred.

The first F-35C flew in early June, a year behind the schedule set in 2007. The first two F-35As are now at Edwards Air Force Base. There are four F-35Bs at NAS Patuxent River, including the first aircraft with a full mission system.

Meanwhile, the very first F-35 that was built for the SDD–AA-1–has already been retired. It was unrepresentative of the final design after changes were made in 2005. After a short test career at Edwards, AA-1 is now on the China Lake weapons range, where it will be “attacked” by live fire to test survivability aspects of the F-35, especially the fuel tanks.

“The next two years will be critical,” Carter declared. He noted that there are some significant test milestones during this period, including sea trials of the F-35B STOVL version, the completion of static tests and the release of Block 2 software. Carter did not mention the low-observability flight tests, due to start at the end of this year. Radar cross-section testing of the full-scale pole model is already well advanced.

Lockheed Martin officials told AIN that static tests of the F-35A and F-35B versions have already been completed, to 150 percent of the structural requirement. The F-35A article survived without a single failure, and is good for 13.5g. The F-35B had just one failure–an auxiliary inlet door hinge, which has already been fixed. Drop tests have already been done on the F-35C to simulate heavy carrier landings. “By doing the static tests early, we’ve proved that few if any retrofits are required–unlike the F-22 or F-18 development programs,” noted O’Bryan.

There are 5.9 million lines of software code in the Block 0.5 release that is now flying on BF-4, the first mission systems test bird. This compares to two million in an operational F-22 aircraft.

The GAO report voiced concern about software development. As required by the restructuring plan, Lockheed Martin is adding a second mission systems test line (Stymsys) at a cost to the company of $100 million. AIN asked, “Will the company find enough additional software engineers to man it?” “The F-35 code is written in C++, so the learning curve is less,” replied O’Bryan. But, he conceded, there are concerns about the software being sufficiently mature to meet the IOC for the U.S. Marines in 2012. The Block 1 software that must be qualified for that IOC is now flying on the CATbird, a Boeing 737 that Lockheed Martin has modified to flight-test the entire F-35 avionics suite.

In Lockheed Martin’s favor, the acting head of the JPO, U.S. Air Force Maj. Gen. Clyde Moore, said the Pentagon “did not uncover any technology or manufacturing show-stoppers in its review and did not de-scope the performance requirements during the restructure process.” In theory, therefore, the program is still on track to deliver an aircraft, which, according to Lockheed Martin, will feature advanced stealth, integrated sensor fusion, net-enabled operations and advanced sustainment.

The F-35 powerplant is another source of controversy. A blade redesign, higher costs for labor and materials, and supply chain problems with the Pratt & Whitney F135 have doubled the cost of its development to about $7.3 billion, according to the GAO.

The conventional F135s being delivered for LRIP Lot 3 are costing $17.7 million each. The STOVL versions with the lift fan are costing almost double–$33.4 million each.

The U.S. Congress has sponsored development of the alternative F136 engine by General Electric and Rolls-Royce to the tune of $2.9 billion. The Pentagon believes it would cost another $1.6 billion to complete development of the F136, tool up for production and support a second engine in service. Secretary Gates has advised President Obama to veto the 2011 defense authorization bill if it includes any more money for the F136.

Although Lockheed Martin has taken most of the heat in recent months, it should be noted that in addition to Pratt & Whitney, Northrop Grumman and BAE Systems are major subcontractors for the airframe. The British company’s role was underpinned by a contribution of $3 billion to the SDD.

In addition, just over 100 other overseas companies in the eight partner countries are providing parts or services to the F-35 program. Lockheed Martin lists 23 significant pieces of hardware on the SDD aircraft that are supplied by non-U.S. companies. The international aerospace industry therefore has a substantial stake in the success of the F-35 program.

But, at the end of the day, it will be the U.S. government that decides whether the F-35 program is too big to fail. “We’re determined to beat the government’s cost estimate,” said Lockheed Martin chief Bob Stevens last month. “Nevertheless, what is the cost to our country, of not having the F-35?” he asked, rhetorically.

Israel Leads New International Prospects

The U.S. government is close to releasing a letter of offer and acceptance (LoA) for the F-35 to Israel, according to Steve O’Bryan, vice president for F-35 business development. Israel has been receiving classified briefings on the F-35 for some years, thanks to its status as a level 3 partner. Singapore has the same status and is now starting its evaluation, O’Bryan added.

The F-35 program is expecting requests for proposals from Japan and Korea later this year. The Indian Navy has requested information on the F-35B and C versions. Belgium, Finland, Greece and Spain have also received classified briefings.

But will any of the eight existing international partners defect from the program in the wake of this year’s troubling news? Canada and Denmark are formally evaluating alternatives, O’Bryan conceded (they are both considering the Boeing F/A-18 Super Hornet instead). But Australia has already appropriated more than $3 billion for the F-35 and will definitely buy its first aircraft in LRIP Lot 6, he said.

Norway reconfirmed its choice last year, after a controversial evaluation against the Saab Gripen. Italy is continuing with negotiations to establish a final assembly and checkout (FACO) line in-country. The likely cost will be $2 billion.

Meanwhile, the Netherlands (one) and the UK (two) have already bought aircraft in LRIP Lot 3, so that they can participate in the U.S. operational test and evaluation phase. According to O’Bryan, this saves them time and provides access to U.S. test ranges.

“The current international partners will stay with the program,” predicted Lockheed Martin chief Bob Stevens. “And we could have as many as 25 countries, all interoperable, as we build U.S. security through our partners’ capabilities,” added the Lockheed Martin chief. “Each one of the international partners will pay less than $60 million, including the UK for its F-35Bs,” O’Bryan declared. “And we’ll hit that price point by the late LRIP lots.”

Regarding the alternative F-35 engine, Lockheed Martin Aeronautics chief operating officer Dan Crowley told AIN that both Turkey and the UK have expressed interest in the F136. Other international partners less so, he added. The Pentagon says that neither the U.S. Navy nor the international partners are keen to have a second option to the F135. –C.P.ٕ

BAE Systems Gears Up for JSF

As a Level-1 partner in the Joint Strike Fighter program, BAE Systems has major responsibilities. While the company’s U.S. arm provides electronic warfare, low-observability and vehicle management expertise, BAE Systems’ UK operation is a major component manufacturer, centered on the site at Samlesbury in northern England.

The company has ploughed around £200 million into the site, and a new flexible manufacturing system is scheduled to go “live” in August or September with up to 16 machines that can produce titanium parts with great versatility. No machine is specific to any one part, so the necessary components can be produced with great savings in time and price.

BAE Systems is responsible for the construction of the JSF’s aft fuselage, vertical and horizontal tails, wingtips and nozzle bay doors. It is also involved in the fuel system, crew escape/life support and prognostics health subsystems.

Shipsets of fuselage, tails and doors are assembled in an expandable facility, phase one of which is complete and producing shipsets for current low-rate production. Orders currently stand at 19 SDD aircraft (12 of which are fliers) and 31 LRIP (low rate of production) aircraft in the first three lots. Long-lead contracts have also been signed for the 32 aircraft in LRIP Lot 4.

Samlesbury’s current output is one shipset every 15 days, although the phase-one facility can produce one every nine days. As the production rate ramps up, phase two will come on line, raising output to one every three days. The third and final facility extension brings Samlesbury up to the required full rate production of one shipset every working day.

F-35B Sets STOVL Milestones

BAE Systems is currently engaged in planning the details of the ramp-up, including the installation of a pulse assembly line and a demonstration of one-a-day production capacity. –David Donald

Testing of the F-35B short takeoff/vertical landing version is in full swing at the Naval Air Warfare Center at Patuxent River, Maryland. Leading the STOVL flight-test effort is Graham Tomlinson of BAE Systems, who undertook the first flight of the STOVL variant on June 11, 2008, and brings a wealth of experience in vertical flight operations to the team.

Four F-35Bs are currently at Patuxent River, supported by VX-23’s fleet of F/A-18 Hornet chase aircraft, and by the end of the year the fifth and final test vehicle will have been delivered to the test team (which will also have three F-35C carrier variants). The first F-35B arrived last November, and by early January began testing of the conversion from wingborne to jetborne flight, following rigorous testing over a hover pit.

“We built down in small steps,” said Tomlinson, “starting with increasingly slower landings before progressing to vertical landings and short takeoffs.” The first fully vertical landing was made on March 18.

When asked how the F-35B compared to the Harrier in terms of ease of takeoff/landing, Tomlinson replied: “It’s chalk and cheese–and so it should be! This is a single-button operation with no special controls–much easier than the Harrier. For short takeoffs you just power up; the system takes care of everything else. On the ski-jump, for instance, the system detects the change in deck angle and doesn’t apply any rotation as it would on a flat deck.”

The recent arrival of F-35 BF-4 is a milestone, as this is the first aircraft equipped with a mission system, including the APG-81 AESA radar. The first three F-35Bs are aerodynamic/aircraft systems testbeds, with BF-1 bearing the brunt of STOVL trials, and BF-2 handling speed/ load testing. It was this aircraft that achieved Mach 1.07 last June.

Testing has revealed a few minor problems. Some work was necessary to “tweak” the tail controls for optimum effect in the disturbed air caused by raising the forward lift fan door. Generally the team is ahead of schedule, and completed 155 flights against a planned 107 last year.

Trials with a ski-jump are expected to begin by the end of next year, the ramp having been built in the UK for installation at Patuxent River. This will be a crucial step for the F-35Bs destined for the Royal Navy. Perhaps more challenging from a testing standpoint will be the trials of short takeoffs from the flat-deck “Wasp” class LHDs from which the F-35B will operate in U.S. Marine Corps service.–David Donald

GAO Report Still Critical and Worried about Concurrency, Sustainability and Software

Here are three extracts from the latest report of the Government Accountability Office (GAO) of the U.S. Congress about the F-35 Joint Strike Fighter, released last March:

• Manufacturing JSF test aircraft continues to take more time, money and effort than budgeted. By December 2009, only four of 13 (flight) test aircraft had been delivered and labor hours to build the aircraft had increased more than 50 percent above earlier estimates. Late deliveries hamper the development flight test program and affect work on production aircraft, even as plans to proceed to significantly ramp-up annual procurement rates.

Some improvement is noted, but continuing manufacturing inefficiencies, parts problems and engineering technical challenges indicate that design and production processes may lack the maturity needed to efficiently produce aircraft at planned rates.

The (Pentagon’s) independent manufacturing review team (IMRT) determined that the planned production ramp rate was unachievable absent significant improvements. Although restructuring actions should help, there is still a substantial overlap of development, test and production activities while DOD continues to invest in large quantities of production aircraft before variant designs are proven and performance verified.

• The program office currently estimates total life-cycle costs for operating, sustaining and maintaining JSF fleets at $764 billion, substantially higher than earlier estimates. The cost per flying hour of the CTOL is projected to be higher than the F-16. NAVAIR officials recently projected total life-cycle costs even higher, at more than $1 trillion.

Service officials are concerned whether future budgets will be able to afford the higher costs expected. Escalating life-cycle costs represent major future funding requirements that could significantly how many aircraft we and our allies can afford to buy.

• Software is developed, integrated and released in five increments. The first increment, needed to enable basic aircraft flying characteristics, is the only one completed. All other software increments are behind schedule. Mission system software, in particular, is behind schedule, poses significant integration challenges, and its progress is difficult to assess. n